Arbitration Mill Sued By San Francisco

A San Francisco attorney has sued the National Arbitration Forum for being biased towards credit companies and ignoring consumer rights.

In 2004, the suit alleges, California resident Elizabeth Marcotte was hit with a $25,0000 award, plus $10,000 in attorneys’ fees, in a credit-card collection case. But Ms. Marcotte allegedly wasn’t notified about the arbitration, because she was served at an old address, even though she had notified the credit-card company of her new address. The NAF awarded the attorneys’ fees without requiring proof that the debt collector actually incurred the fees, according to the suit. Ms. Marcotte wasn’t reached for comment.

In another credit-card collection case, the NAF allegedly entered an award against California resident John Sheakley, without responding to his request to appear at a hearing and explain why he didn’t owe the purported debt to a bank that was a predecessor of FIA Card Services.

NAF is the same company that once decided that a 61-year-old identity theft victim owed $46,000 to a bank she never actually did business with.

San Francisco Sues Provider of Arbitrators [WSJ via U.S. PIRG Consumer Blog]